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UK watchdog to look at Paramount’s $110bn takeover of Warner Bros Discovery
TL;DR
The UK competition watchdog is investigating Paramount's $110bn takeover of Warner Bros Discovery to assess potential competition issues. The decision on whether to proceed with a deeper investigation is due by August 7.
Key points
- UK competition watchdog opens investigation into Paramount's takeover
- Deal valued at $110 billion will create a major media powerhouse
- CMA to decide by August 7 on further investigation
Mentioned in this story
Paramount SkydanceWarner Bros DiscoveryCompetition and Markets Authority
The UK competition watchdog has opened an investigation into Paramount Skydance’s $110bn (£82bn) takeover of Warner Bros Discovery (WBD).
The deal will create a media powerhouse controlling assets including the Paramount and HBO Max streaming services, Channel 5 and TNT Sports, which broadcasts Champions League, Premier League and the Olympics, the Hollywood studios behind franchises including Superman, Batman and Top Gun, as well as HBO, home to shows including Game of Thrones, The White Lotus and Succession.
The Competition and Markets Authority (CMA) said it has opened an investigation to ascertain whether the tie-up will result in a “substantial lessening of competition” in the UK.
The CMA said it will decide by 7 August whether the deal warrants a more in-depth phase 2 investigation, which can take up to five months.
In February, Paramount beat Netflix to take over WBD, bringing an end to a high-stakes bidding war between the media companies.
Netflix refused to increase its bid, saying that at the price offered for WBD it was “no longer financially attractive” to continue the bidding war.
Paramount, which paid a $2.8bn fee to Netflix for breaking the streamer’s $82.7bn deal for WBD’s streaming and studio assets, is facing regulatory scrutiny and a backlash from critics worried about the impact on Hollywood.
In April, more than 1,000 film and TV industry professionals, including Mark Ruffalo, Kristen Stewart, Ben Stiller and Joaquin Phoenix, signed an open letter protesting against the deal.
“The integrity, independence and diversity of our industry would be grievously compromised,” the letter said. “Competition is essential for a healthy economy and a healthy democracy. So is thoughtful regulation and enforcement.”
The US senator Elizabeth Warren has described the deal as “an antitrust disaster threatening higher prices and fewer choices for American families”.
In April, David Ellison, chief executive of Paramount, told a movie theatre owners convention that he promised to continue to make a minimum of 30 films a year across the Paramount and Warner Bros film studios.
Q&A
What is the value of Paramount's takeover of Warner Bros Discovery?
Paramount's takeover of Warner Bros Discovery is valued at $110 billion.
What assets will the merger control after the takeover?
The merger will control assets including Paramount and HBO Max streaming services, Channel 5, TNT Sports, and major Hollywood studios.
When will the UK CMA decide on the investigation into the merger?
The UK Competition and Markets Authority will decide by August 7 whether the deal requires a more in-depth phase 2 investigation.
